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Wed 4 Jul 2012 04:10 PM

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Bahrain to build 530 new homes in gov’t housing push

Manama is planning up to 15,000 new housing units in a bid to tackle waiting lists

Bahrain to build 530 new homes in gov’t housing push
Construction workers are seen building new apartment blocks at the Al Muneera development during a media tour organized by Aldar Properties PJSC, Abu Dhabis biggest real estate company, in Abu Dhabi, United Arab Emirates, on Tuesday, March 27, 2012. Property values and rents slumped in the United Arab Emirates after banks curtailed lending and speculators left the market during the global recession. (Bloomberg)

Bahrain is to start construction of 530 new housing units in Manama this month, part of government plans to build 15,000 new homes and cut waiting lists, it was reported on Tuesday.

Four Bahraini contractors were selected to start the construction work on the 530 homes this month, which are due to be completed within a year, the Bahrain Housing Ministry told the Bahrain News Agency (BNA) on Tuesday.

The Manama government plans to build around 15,000 housing units in the north of the capital over the next few years. The first phase will see 2,300 units built over a two-and-a-half-year period.

The first phase will also include the construction of 2,470 housing units by the private sector. The Housing Ministry added that the second phase, which will consist of 4,000 housing units, is expected to start by the end of September.

The protest-hit kingdom has one of the largest shortfalls of affordable housing in the GCC, lacking an estimated 40,000 homes for its population. More than 86 percent of Bahraini households qualify as low-income, according to Jones Lang LaSalle. The country has more than 55,000 citizens on a waiting list for social housing and the latest announcement is part of plans to try and reduce this figure.

Despite government housing initiatives and aims to build low-cost units for citizens, property analysts said earlier this year that many Bahrainis’ preference for villas rather than apartments was a major obstacle.

“Even when developers build housing units at prices that meet market expectations in the form of apartments, sales profiles remain weak due to a general resistance to apartment living by Bahraini nationals,” property consultancy CBRE said in a report.

Bahrain’s residential real estate market has struggled in the wake of widespread protests in the Gulf state, which saw thousands take to the streets to demand curbs on the ruling family’s power.

Compound communities have been particularly affected, including those in the Saar Budaiya area which are used by workers who commute across the border to Saudi Arabia, CBRE said.

The developments are close to Shi’a neighbourhoods that have been the focal point of the unrest.

“This has resulted in an unsettling environment for those with young families and there has been a gradual migration out of the area,” analysts wrote.

“Consequently, both rents and occupancy have tumbled in compounds to varying degrees throughout the year.

"At worst, rents and occupancy have dropped by around 30 percent but many compounds have been able to sustain occupancy through rent reductions.”